Germany’s trade surplus shrinks in May owing to lacklustre exports

According to data published by the federal statistics office Destatis earlier on Friday, Germany's trade surplus was down in May as exports declined sharply from the previous month. The seasonally-adjusted trade surplus narrowed to 22.2 billion euros ($24.6 billion) in May from a record high of EUR24.1 billion in April.

There was a 2.1 percent increase in exports to EU countries for May with a 3.5 percent increase for the first five months of 2016. Exports outside the EU declined 1.3 percent for the first five months of the year, but with annual growth for May.

German exports fell sharply for the month and in seasonally-adjusted terms, there was a 1.8 percent decline, while there was a 1.5 percent increase over the first five months of the year. Seasonally-adjusted imports rose marginally for the month with a marginal 0.2 percent increase for the first five months of 2016. The overall German current account surplus expanded to EUR115.6 bn for the first five months of 2016 from EUR104.5 bn the previous year as the primary income surplus widened.

Disappointing exports data will fuel concerns that underlying global trade is weakening with future data under close scrutiny. German competitiveness has been damaged in the UK market following the UK referendum vote. Narrowing trade surplus was yet another sign that Europe's largest economy lost momentum in the second quarter after a strong start to the year.